Britain is the epicentre of Europe’s financial system with London the long established financial capital. Financial and insurance services account for 3.1% of all UK jobs and the industry is responsible for 7.2% of the UK’s total GVA. In 2015, the UK’s trade surplus in financial services reached £63.4 billion, which was more than the combined surpluses of the Unites States, Switzerland and Luxembourg. This surplus is driven in part by the UK’s leading position in cross border bank lending, foreign exchange trading, international insurance premiums income and, more recently, FinTech.
In 2015, financial services accounted for 23% of all UK services exports, with London alone accounting for 56% the UK’s total financial services exports. The EU accounts for roughly 44% of the UK’s financial services exports and 37% of the UK’s financial services imports. Outside the EU, the United States and Japan are the UK’s most important financial services trade partners.
One of the main reasons why London attracts affiliates of non-EU banks is that it provides an efficient hub from which to service the EU. The ability to do this depends on compliance with EU regulations. “Passporting rights” give institutions accredited by regulators in one EU member state the ability to supply services across the EU. Whether these rights can be secured by the UK after it leaves the EU is an important point of negotiation. With foreign nationals, including 382,000 from the EU, accounting for 1 in 8 employed in the UK’s financial and business services sector decisions regarding the EU citizens rights to work in the UK will be closely watched by the industry.